Detroit and Southeast Michigan's premier business news and information website

The Packard plant has long been the target of vandals, scrappers, graffiti taggers and arsonists.

The $2 million bid to buy the abandoned Packard plant has been scrapped.

Now Fernando Palazuelo, a developer from Peru, can buy the plant for $405,000, his bid during last month's Wayne County tax foreclosure auction.

Chicago-area developer Bill Hults failed to make a $1.8 million payment to Wayne County for the 3.5 million-square-foot property on the city's east side by Friday's 3 p.m. deadline. He had made $200,000 in nonrefundable deposits and had received several payment deadline extensions.

The county will now "engage (Palazuelo) for the purposes of determining his intentions" for the property, Wayne County Treasurer Ray Wojtowicz said in an emailed statement.

That will likely start Monday, according to Chief Deputy Treasurer David Szymanski. A deadline for Palazuelo to pay will likely be set that day.

"We continue to look for the best conclusion of the auction process that is mandated by state law and hope work on the Packard plant can commence soon," Wojtowicz said.

An email sent to Palazuelo on Friday afternoon was not immediately returned.

Palazuelo placed the third-highest bid for the plant at October's tax foreclosure auction. Hults placed the second-highest bid, and suburban Dallas family physician Jill Van Horn placed the highest bid at $6,038,000. Her bid was also canceled after she failed to pay for the property, which sits on 40 acres.

Hults had wanted to turn the plant – which sits on 40 acres and has long been the target of scrappers, vandals, graffiti taggers and arsonists – into a development with a 120-room luxury hotel, more than 750 lofts, 1,500 single-family residences, and commercial and dining space. It would have also included light manufacturing space.

Hults told Crain's last month that it would have been a $750 million to $850 million development.

Detroit real estate experts had been skeptical about Hults' plans because of the development's overall price tag, size and location outside of the central business district.

This is the second time Hults has failed to deliver in his attempt to buy the plant. In September, he was in talks with county officials to buy the plant for $974,000 — the back property taxes and fees owed to the county — before it could go to auction. But he walked away from the deal by failing to make the payment.